IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF JANUARY 2019 BEFORE THE HON’BLE MR.JUSTICE ALOK ARADHE WRIT PETITION Nos.47450-47452/2017 (GM DRT) BETWEEN 1. SMT. PAVANA G P AGED ABOUT 37 YEARS, W/O SRIHARI, R/AT 547, 9TH CROSS, 7TH BLOCK, JAYANAGARA, BENGALURU - 560082 2. SMT. KRITHY PRADEEP, AGED ABOUT 44 YEARS, W/O PRADEEP C S R/AT NO 1 FARAH GARDEN, 17/1, WELLINGTON STREET, RICHMOND TOWN, BENGALURU – 560025.
... PETITIONERS (BY SRI B C SEETHARAMA RAO, ADV.) AND 1. STATE BANK OF INDIA, STRESSED ASSETS MANAGEMENT BRANCH, NO 61, 4TH FLOOR, RESIDENCY ROAD, BENGALURU – 560025, REPT BY ITS CHIEF MANAGER.
2. M/S J K TRANSPORTS, A PARTNERSHIP FIRM, OFFICE: NO.32/1, SRI RAMANUJA BHATTACHARYA NILAYA, 3RD CROSS, KRISHNA TEMPLE ROAD, MALLATHAHALLI, BENGALURU - 560072 3. SRI RAMAKRISHNA, AGED ABOUT 48 YEARS, S/O SRI GOPALAKRISHNAIAH 4. SMT. K BASAVAMADHAVI MAJOR IN AGE W/O SRI RAMAKRISHNA RESPONDENTS NO.3 AND 4 ARE RESIDING AT NO.32/1, SRI RAMANUJA BHATTACHARYA NILAYA, 3RD CROSS, KRISHNA TEMPLE ROAD, MALLATHAHALLI, BENGALURU-560072 ALSO AT: NO.30, AGB COLONY, MAHALAKSHMI LAYOUT, BENGALURU-560086 5. SRI SHANKAR, AGED MAJOR, S/O SRI H ANJANEYAPPA, R/AT NO.189, KONANAKUNTE CROSS, YELACHENAHALLI, KANAKAPURA ROAD, UTTARAHALLI HOBLI, BENGALURU - 560078 6. SRI T V RAMAKRISHNA REDDY, AGED ABOUT 49 YEARS, S/O SRI VENKATA REDDY, R/AT NO.6, 4TH CROSS, SUMANGALI SEVA ASHRAMA, CHOLANAYAKANAHALLI, R T NAGAR, BENGALURU-560032.
... RESPONDENTS (BY SMT. LAVANYA.S, ADV. FOR SRI. VIGNESH SHETTY, ADV. FOR R1 ) THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR RECORDS IN O.A.431/2009 ON THE FILE OF THE HON'BLE DEBTS RECOVERY TRIBUNAL, BENGALURU AND SET ASIDE THE ORDER DTD.9.10.2009 CONFIRMING THE ORDER OF ATTACHMENT AND THE PROCEEDINGS IN DCP 6100 AS PER ANNEX-E ETC.
THESE WRIT PETITIONS COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R Sri.B.C.Seetharama Rao, learned counsel for the petitioners. Smt.Lavanya.S, learned counsel for Sri.Vignesh Shetty for respondent No.1.
2. The writ petitions are admitted for hearing. With the consent of the parties, the matter is heard finally.
3. In these petitions under Articles 226 and 227 of the Constitution of India, the petitioners have assailed the validity of the order dated 09.10.2009 passed by the Recovery Officer as well as the order dated 24.07.2017 passed by the Debts Recovery Tribunal, Bengaluru (hereinafter referred to as ‘the Tribunal’ for short). The petitioners also seeks quashment of attachment of the suit property dated 01.08.2016.
4. In order to appreciate the petitioners’ grievance, few facts need to be mentioned which are stated infra.
5. The petitioners claim ownership of the property bearing No.760 situated at Block No.II of Matadahalli, R.T.Nagar, Bengaluru. The petitioners claim to have purchased the aforesaid property on 17.04.2015 from its erstwhile owner.
6. It is the case of the petitioners that respondent Nos.2 to 6 have availed service of credit facility for their business from respondent No.1 and respondent No.1 filed the original application namely O.A.No.431/2009 before the Debts Recovery Tribunal at Bengaluru for recovery of sum of Rs.2,70,00,000/- with interest. In the aforesaid proceedings, ex-parte order was passed on 09.10.2010 without issuing any notice to the petitioners and the property belonging to the petitioners was attached. Being aggrieved, the petitioners preferred an appeal. The said appeal came to be dismissed by the Tribunal vide order dated 24.07.2017. In the aforesaid factual background, the petitioners have filed these petitions.
7. Learned counsel for the petitioners submits that the Recovery Officer had carried out the proceedings in flagrant violation of principles of natural justice. Inasmuch as neither any notice nor any opportunity of hearing was afforded to the petitioners. It is further stated that even the property belonging to the petitioners which was not mortgaged with respondent No.1-Bank has been attached that to without giving an opportunity of hearing to the owner of the property.
8. On the other hand, learned counsel for respondent No.1-Bank has supported the order passed by the Recovery Officer as well as by the Tribunal, Bengaluru.
9. It is further submitted that the petitioners have remedy to file an appeal under Section 20 of the Recovery of Debts and Bankruptcy Act, 1993.
10. I have considered the submissions made by both sides.
11. Before proceeding further, it is necessary to take note of the proceedings before the Presiding Officer of the Tribunal, Bengaluru, which reads as under:
ORDER OF THE REGISTRAR OA 431/2009 Registered as OA as per the order of Registrar Incharge Dated 12-08-2009 to be placed before Hon’ble P.O dt. 19- 08-2009 Sd/-
19-08-2009 App – JDS For F/P Asst. Registrar D.R.T.Bangalore 12-08-2009 Heard the counsel. Perused the records Inview of urgency pleaded Interim Injunction is granted restraining D4 from Alienating ‘B’ schedule property until further orders.
Signature Received I.O Advocate for Applicant IA 2003/09 Heard the counsel. Perused the records Inview of urgency pleaded, Interim Attachment of IA Schedule Property in case of non furnishing security equalant to OA Interim Orders by D2 within two days.
Urgent notice to respondents and summons to defendants by 23-09-09 23-09-09 App – JDS Sd/- Presiding Officer 19/08/09 RP/notice to respondents RP/SS to defendants D3 - Returned as ‘left’ D2 - Returned as ‘left’ D4 - Returned as ‘no such person’ D1 - Returned as ‘left’ 09-10-09 App - JDS D1 to D4 - Exparte Defendants called absent set exparte. For AS evidence by 09-10-09 Sd/- Presiding Officer 23/09/09 A’s evidence Evidence filed and marked as Ex.A1 through AW-1 Heard Attachment made absolute.
OA is allowed with costs (vide Separate order.
Sd/- Presiding Officer 09/10/09 12. From a perusal of the aforesaid proceedings, it is evident that the proceedings for attachment of the property have been finalized without issuing any notice to the petitioners as well as the owner of the property in question.
13. The order dated 23.09.2009 clearly indicates that the Presiding Officers has erroneously proceeded on the assumption that the defendants in the said proceedings have been served. Whereas, the endorsement made in the order sheet itself shows that the aforesaid defendants were not served. In other words, the impugned order has been passed in flagrant violation of principles of natural justice.
14. It is trite law that in case, the order is passed in flagrant violation of principles of natural justice, the same has no sanctity in the eye of law. It is equally well settled law that if the order is passed in flagrant violation of principles of natural justice, alternative remedy is no bar in entertaining the petitions.
15. In this connection, reference is made to the law laid down by the Hon’ble Supreme Court in case of ‘WHIRLPOOL CORPORATION VS REGISTRAR OF TRADE MARKS, MUMBAI & OTHERS’, (1998) 8 SCC 1.
16. In view of the aforesaid enunciation of law by the Hon’ble Supreme Court as well as taking into account the fact that the proceedings against the petitioners have been passed in flagrant violation of principles of natural justice, the impugned proceedings before the Tribunal cannot be sustained in the eye of law.
17. Hence, the proceedings before the Tribunal, Bengaluru as well as the order dated 24.07.2017 passed by the Debts Recovery Tribunal is hereby quashed and set aside. The matter is remitted back to the Debts Recovery Tribunal, Bengaluru to afford an opportunity of hearing to the petitioners and thereafter to proceed in the matter expeditiously preferably within a period of four months from the date of receipt of certified copy of the order passed today.
Accordingly, the petitions are disposed of.
In view of disposal of the petitions, I.A.No.1/2018 does not survive for consideration and is accordingly disposed of.
Sd/- JUDGE VM CT-HR